Royal aides were last night facing fresh questions about their oversight of one of Prince Charles's most prominent charities, following two arrests on suspicion of fraud and money laundering at the Foundation for Integrated Health.

Sources close to the charity, which campaigns for the wider application of complementary medicine in the National Health Service, said the charity's board and Clarence House both faced scrutiny of how an official, who has since resigned, could allegedly defraud it of up to £300,000.

A former senior executive at the charity said yesterday that the prince's aides at Clarence House had access to its monthly accounts during at least some of the period when the alleged fraud was understood to have taken place. The charity has received more than £1m in public funding, mostly from the Department of Health, and the prince is its president.

Clarence House declined to comment, but one of the prince's closest aides admitted that the arrests had put his charities in "uncharted territory".

On Monday, a 49-year-old man – understood to have been a former senior employee at the charity – and a 54-year- old woman were arrested. The arrests came after the auditors had refused to sign off the charity's 2008 accounts over irregularities. Both have been released on police bail to reappear in June.

Charles's good causes are overseen by Sir Tom Shebbeare. The Prince's Charities organisation oversees 20 good causes, raising more than £100m a year. "There are questions about the accountability of the Foundation board when this happened and the oversight by Clarence House," said one former trustee of the FIH, who asked not to be named.

Kim Lavely, the foundation's chief executive until September 2008, told the Guardian staff at the Prince's Charities had regular access to the organisation's monthly accounts and formal meetings with the charity's management every quarter.

"There were quarterly meetings with the Prince's Charities and very regular informal contact, probably on a weekly basis," she added. "They had access to the monthly accounts and some time after I left they moved into the same building as the Prince's Charities at Clarence House, so they were very close."

Republic, the campaign for an elected head of state, called for Prince Charles and his aides to "come clean about what level of oversight they have of the charities which operate in his name". Graham Smith, campaign manager, said: "It seems implausible that Clarence House would not have an intimate knowledge of their operations, especially when any criminal activity such as the alleged fraud and money laundering at the FIH, has the potential to seriously undermine the credibility of Charles's aspirations to become head of state."